Pro-rata reinsurance determines the reinsurer's share of losses in a different manner than excess of loss reinsurance.

Question

Quizplus · Accepted Answer

Pro-rata reinsurance involves the reinsurer sharing a proportionate share of the ceding company's premiums and losses, while excess of loss reinsurance involves the reinsurer only covering losses that exceed a certain threshold. Hence, the two types of reinsurance determine the reinsurer's share of losses differently.

Pro-Rata Reinsurance Determines the Reinsurer's Share of Losses in a Different